Barclays top U.S. structured products agent for the year; issuance up 75%

By Emma Trincal

New York, June 30 - Barclays remained the top agent in the U.S. structured products market for the first half of the year but lost its No. 1 ranking to Merrill Lynch for the quarter and the month to date, according to preliminary data compiled by Prospect News.

Issuance hit a new high this year of $29.28 billion, up 75% from the first half of last year. Simultaneously, the number of deals doubled over the period to 3,614 from 1,819.

Barclays priced $10.18 billion during the first half of the year in 1,262 transactions, taking 35% of the market, a percentage and ranking that remained the same as last year's comparable period.

Merrill Lynch moved up one notch to the second slot with $4.8 billion sold in 169 deals, or 16.5% of the total issuance.

Merrill Lynch's rise knocked down JPMorgan, formerly No. 2, into third place with $4.42 billion priced in 520 deals, or 15% of the total volume.

Different sizes

Some dealers priced bigger deals compared to the $8 million average size seen in the overall market in the year to date.

Merrill Lynch topped the list of large-size deals with an average issue size of $28.5 million. It was followed by Goldman Sachs, which averaged $14.5 million.

Barclays priced deals in the middle. Its $8 million average size was on par with the market average.

Others brought mini-deals to market on average, such as Royal Bank of Canada, which had an average issue size of $1 million, or Credit Suisse with $3 million.

Keeping their rank

Rankings varied by product type and asset class, data compiled by Prospect News showed.

With rates products and equity products, last year's leaders kept their lead so far in 2010. Other asset classes saw changes in the rankings.

But even for banks remaining No. 1 in the equity and rates asset classes, competition continued to be fierce, eroding the leaders' market shares year over year.

Agents sold $2 billion in interest rates deals, or two-thirds more than the year before.

In this category, Morgan Stanley remained the top agent with $555 million sold. Yet, its market share decreased to 28% from 40% last year.

Barclays remained the undisputed leader in single-stock products issuance with $1.86 billion sold in this group of products. However, its market share shrank over the period to 36% from 43.5%.

Agents overall sold $5.16 billion of single-stock structured products during the first half of the year, nearly three times more than the $1.86 billion deals sold during the same time last year.

JPMorgan kept the lead in equity index-linked issuance with $2.73 billion sold, which represents 34.4% of this sub-market. But its portion of the equity index pie was slightly higher last year at 38.9%.

Equity index-linked products totaled $7.95 billion this year, up 41% from last year.

Ranking changes

Rankings changed dramatically for commodities and currency notes.

For instance, Barclays, the No. 1 commodity issuer last year with 69% of the market, fell to ninth place for the first half of 2010 with only 1.88% of the market.

The asset class itself did not fare well as agents priced $2.87 billion in commodities-linked products this year, little more than half of last year's $5.5 billion commodity issuance.

Barclays' sharp decline may be partly due to three large energy-related iPath exchange-traded notes sold in the first half of last year for a total of $3.75 billion.

Merrill Lynch topped commodity issuance this year with $973 million and a third of the total, moving from its second slot of last year and tripling its market share in this category.

Goldman Sachs became the top agent for currency deals this year with $302 million sold, gaining 27% of the market.

The total issuance for foreign-exchange products was $1.1 billion, nearly three times more than the year before. Goldman Sachs made a sharp rise, moving up three notches from No. 4 last year.

Goldman Sachs priced several large offerings on the behalf of Eksportfinans ASA in January based on the performance of the Korean won relative to the yen and to the dollar.

Notable deals

Some dealers brought to market unusual structures or popular asset classes that contributed to their ranking.

For instance, Barclays' top position in the league tables was partly due to the success of the iPath S&P 500 VIX Short-Term and Mid-Term Futures ETNs the agent sold for a total of $8 billion in five different offerings between January and April.

Autocallable deals rose in popularity, and some dealers thrived with large autocallable offerings.

In April, Credit Suisse AG, Nassau Branch sold $257 million of autocallable index knock-out notes due May 2, 2011 linked to the S&P 500.

In April, Goldman Sachs Group, Inc. priced two index-linked notes deals in excess of $150 million each, one of which being a $156.77 million autocallable deal linked to the Euro Stoxx 50, FTSE 100 and Topix indexes.

Another popular and repeat deal was JPMorgan Chase & Co.'s ETNs due May 24, 2024 linked to the Alerian MLP index.

Merrill tops Q2

For the just-concluded second quarter, U.S. agents priced $10.56 billion in 1,760 deals, a 33% increase from last year's second quarter. Deals nearly doubled to 1,769 from 992 during the prior period.

Merrill Lynch rose from No. 4 to top agent this quarter, selling $2.23 billion in 89 deals and increasing its penetration of the market to 21.13% from 13%.

JPMorgan, which was the top agent for the second quarter of 2009, fell one notch to the second slot with $2.19 billion sold in 284 deals.

Goldman Sachs moved up to third place from fifth last year, with $1.37 billion sold in 105 deals, or 13% of the total volume.

Barclays was No. 4 for the quarter and No. 6 for June.

Slower June

Issuance slowed down for the month of June. The total volume was $2.28 billion in 506 deals, down by a third from June of last year when agents sold $3.39 billion.

Merrill Lynch continued its ascent for the month of June, taking the No. 1 slot, up two notches from its third ranking in June 2009. The bank priced $657 million in 28 deals, increasing its market share to 29% from 12% a year before.

Goldman Sachs made significant progress as well, growing to the No. 2 agent from No. 6. It sold $360 million in 43 deals, or 15.8% of the total.

Year to date, all structured products

2009 Comparables

	Underwriter	Amount	No.	Share	Rank	Amount	No.	Share
1	Barclays	10.178	1262	34.76%	1	5.873	321	35.06%
2	Merrill Lynch	4.808	169	16.42%	3	2.227	90	13.30%
3	JPMorgan	4.420	520	15.10%	2	3.040	387	18.15%
4	Morgan Stanley	2.562	148	8.75%	4	1.654	161	9.87%
5	Goldman Sachs	2.545	175	8.69%	5	1.058	81	6.32%
6	UBS	1.861	202	6.36%	7	0.600	116	3.58%
7	Citigroup	0.830	91	2.83%	6	0.673	36	4.02%
8	Deutsche Bank	0.539	77	1.84%	8	0.475	72	2.83%
9	RBC	0.478	459	1.63%	9	0.283	252	1.69%
10	Credit Suisse	0.335	114	1.15%	11	0.141	61	0.84%
	Total	29.281	3614	16.751	1819
	Average size:	0.008	0.009
Year to date, interest rate structured products
					2009 Comparables
	Underwriter	Amount	No.	Share	Rank	Amount	No.	Share
1	Morgan Stanley	0.555	30	27.65%	1	0.495	32	39.97%
2	Barclays	0.452	70	22.53%	3	0.154	21	12.40%
3	Merrill Lynch	0.404	28	20.13%	7	0.056	3	4.54%
4	Citigroup	0.219	27	10.94%	2	0.180	9	14.51%
5	UBS	0.121	15	6.04%	10	0.017	2	1.39%
6	Goldman Sachs	0.074	8	3.70%	5	0.071	5	5.75%
7	RBC	0.051	12	2.52%	9	0.043	3	3.45%
8	BMO	0.050	1	2.49%
9	JPMorgan	0.023	2	1.15%	6	0.065	4	5.21%
10	Deutsche Bank	0.021	4	1.06%	8	0.043	5	3.46%
	Total	2.007	201	1.239	90
	Average size:	0.010	0.014
Year to date, commodity structured products
					2009 Comparables
	Underwriter	Amount	No.	Share	Rank	Amount	No.	Share
1	Merrill Lynch	0.973	39	33.83%	2	0.648	25	11.78%
2	JPMorgan	0.584	41	20.32%	3	0.371	33	6.75%
3	UBS	0.420	16	14.60%	11	0.006	4	0.12%
4	Deutsche Bank	0.225	21	7.81%	7	0.043	5	0.78%
5	Morgan Stanley	0.222	19	7.71%	5	0.171	15	3.12%
6	Goldman Sachs	0.172	15	5.99%	6	0.161	16	2.93%
7	Nuveen	0.111	47	3.85%	4	0.240	44	4.36%
8	Credit Suisse	0.070	10	2.44%	10	0.007	2	0.12%
9	Barclays	0.054	15	1.88%	1	3.794	14	68.99%
10	Citigroup	0.028	7	0.99%	8	0.034	3	0.63%
	Total	2.875	236	5.500	169
	Average size:	0.012	0.033
Year to date, foreign exchange structured products
					2009 Comparables
	Underwriter	Amount	No.	Share	Rank	Amount	No.	Share
1	Goldman Sachs	0.302	15	27.30%	4	0.039	4	8.76%
2	JPMorgan	0.292	47	26.39%	1	0.201	12	45.38%
3	Merrill Lynch	0.289	11	26.10%	2	0.088	4	19.89%
4	UBS	0.158	10	14.31%	3	0.053	7	11.96%
5	Citigroup	0.019	3	1.72%
6	Morgan Stanley	0.015	7	1.37%	5	0.035	6	7.91%
7	Deutsche Bank	0.013	5	1.22%	9	0.003	1	0.70%
8	RBC	0.006	2	0.53%	6	0.011	2	2.59%
9	HSBC	0.005	4	0.43%
10	RBS	0.003	1	0.27%
	Total	1.106	111	0.442	42
	Average size:	0.010	0.011
Year to date, single stock structured products
					2009 Comparables
	Underwriter	Amount	No.	Share	Rank	Amount	No.	Share
1	Barclays	1.861	1030	36.05%	1	0.813	236	43.55%
2	UBS	0.865	103	16.75%	5	0.157	37	8.40%
3	Merrill Lynch	0.643	15	12.46%	10	0.017	2	0.91%
4	Morgan Stanley	0.582	17	11.28%	2	0.260	21	13.94%
5	Citigroup	0.376	25	7.28%	4	0.172	10	9.20%
6	RBC	0.316	413	6.13%	7	0.068	208	3.65%
7	JPMorgan	0.237	161	4.59%	9	0.058	110	3.13%
8	Wells Fargo	0.158	28	3.06%
9	RBS	0.063	171	1.21%
10	Credit Suisse	0.033	2	0.64%	13	0.003	1	0.14%
	Total	5.161	1971	1.867	780
	Average size:	0.003	0.002
Year to date, equity index structured products
					2009 Comparables
	Underwriter	Amount	No.	Share	Rank	Amount	No.	Share
1	JPMorgan	2.735	173	34.37%	1	2.182	198	38.81%
2	Merrill Lynch	2.420	71	30.42%	2	1.239	48	22.04%
3	Goldman Sachs	1.944	133	24.43%	3	0.710	48	12.64%
4	Morgan Stanley	0.174	16	2.19%	4	0.382	53	6.79%
5	UBS	0.147	30	1.85%	6	0.266	47	4.73%
6	Barclays	0.135	59	1.69%	12	0.048	16	0.85%
7	Citigroup	0.109	19	1.37%	5	0.283	12	5.04%
8	Deutsche Bank	0.083	16	1.04%	7	0.156	37	2.77%
9	HSBC	0.077	64	0.96%	13	0.025	11	0.45%
10	Wells Fargo	0.062	15	0.78%	11	0.049	4	0.87%
	Total	7.956	646	5.621	561
	Average size:	0.012	0.010
Second quarter, all structured products
					2009 Comparables
	Underwriter	Amount	No.	Share	Rank	Amount	No.	Share
1	Merrill Lynch	2.232	89	21.13%	4	1.062	45	13.41%
2	JPMorgan	2.192	284	20.76%	1	1.850	189	23.35%
3	Goldman Sachs	1.369	105	12.96%	5	0.670	47	8.46%
4	Barclays	1.351	540	12.79%	2	1.499	187	18.91%
5	UBS	1.066	110	10.10%	7	0.348	62	4.39%
6	Morgan Stanley	1.022	61	9.68%	3	1.094	91	13.80%
7	Citigroup	0.325	45	3.08%	6	0.460	22	5.81%
8	RBC	0.247	249	2.33%	9	0.187	162	2.36%
9	Deutsche Bank	0.224	40	2.12%	8	0.296	36	3.74%
10	Credit Suisse	0.191	62	1.81%	11	0.085	32	1.07%
	Total	10.560	1769	7.925	992
	Average size:	0.006	0.008
June, all structured products
					2009 Comparables
	Underwriter	Amount	No.	Share	Rank	Amount	No.	Share
1	Merrill Lynch	0.657	28	28.75%	3	0.409	18	12.05%
2	Goldman Sachs	0.360	43	15.76%	6	0.159	20	4.69%
3	UBS	0.326	40	14.28%	8	0.121	23	3.56%
4	JPMorgan	0.277	72	12.10%	2	0.673	70	19.85%
5	Morgan Stanley	0.230	17	10.06%	4	0.364	29	10.74%
6	Barclays	0.134	140	5.89%	1	1.061	79	31.29%
7	Citigroup	0.088	12	3.86%	5	0.194	13	5.71%
8	RBC	0.076	79	3.31%	7	0.125	63	3.69%
9	Deutsche Bank	0.072	13	3.17%	9	0.069	12	2.02%
10	Wells Fargo	0.022	5	0.97%	13	0.033	3	0.97%
	Total	2.284	506	3.392	392
	Average size:	0.005	0.009
Prospect News Structured Products Manager Rankings

Criteria

• The tables include all dollar-denominated offerings sold in the United States as public, Rule 144A or similar deals reported to Prospect News.

• Offerings are included in the time period in which they price.

• Amounts are based on the total sales price (face amount multiplied by the offering price). The full amount is credited to the lead manager. For multiple managers, the total value is divided equally among all the firms.

• Each tranche is counted as a separate deal.

• Notes are included that convert into or are linked to one or more stocks, indexes, commodities, currencies, interest rates or other assets. For interest-rate deals, callables with no further structure are excluded.

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